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(a) Every franchise shall be deemed to be held in trust, and to be personal to the franchisee. Any transfer that is made without the prior written approval of the city shall be deemed to impair that trust. A transfer is any transaction pursuant to which:
(1) A cable communications system, or any part thereof, is sold or assigned, directly or indirectly, to any person other than the franchisee holding a franchise for that system (except the term does not include the sale of portions of a cable communications system that are removed);
(2) Any change, acquisition, or transfer of control of a franchisee or its direct or indirect parents, whether by merger, consolidation, a sale of assets or ownership interests, or by any other means, occurs. A transfer occurs whenever there is a change, acquisition or transfer of control of more than a ten percent ownership in the outstanding voting securities or more than a twenty percent ownership in the outstanding non-voting securities of the franchisee or its direct or indirect parents by any entity, or a group of entities acting in concert. However, a transfer also occurs whenever there is a change in actual working control, in whatever manner exercised, over the affairs of a franchisee or its direct or indirect parents. Without limiting the above, any change in the general partners of a franchisee will be presumed a change in control; or
(3) The rights or obligations held by the franchisee under its franchise are transferred, sold, assigned, or leased, in whole or in part, directly or indirectly, to another party.
(b) Notwithstanding any other provision of this chapter, pledges in trust, hypothecations, encumbrances, leases, or mortgages of the assets of a cable communications system to secure indebtedness may be made without application and without the city's prior written consent, unless a franchise specifies otherwise. However, no such arrangement may be made if it would in any respect under any condition: (1) prevent the cable communications system franchisee or any successor from complying with the franchise or applicable law; or (2) permit any third party (including any lender) to succeed to the interest of the franchisee, or to own or control the system, without the prior written consent of the city. Any mortgage, pledge, hypothecation, encumbrance or lease shall be subject to and subordinate to the rights of the city, as appropriate, under any franchise, this chapter, or other applicable law.
(c) The successors and assigns of the franchisee shall be fully bound by the terms and conditions of the franchise.
(Ord. 4636 § 5, 2000)